The EIU view

Following a corruption case that damaged the credibility of the People's Party, a censure motion led to the collapse of Mariano Rajoy's minority government in June. Pedro SŠnchez, of the Spanish Socialist Workers' Party, now heads a weak centre-left minority government. Mr SŠnchez intends to see out the parliamentary term, which ends in mid-2020, but there is a risk of an earlier vote. After estimated real GDP growth of 2.6% in 2018, we expect average growth of 2.1% in 2019-23.

Government bond yields rose in October
Medium- and long-term debt issuance for January-September was equivalent to 87% of the funding plan. Italian contagion, fiscal concerns and higher US rates exerted pressure.